East Palestine puts leasing proposal on hold pending ethics question

March 11, 2014

EAST PALESTINE - A council that has worked together fairly smoothly over the last year is now divided, and emotions ran hot Monday night in council chambers.

A vote to repeal legislation approved last month passed following a tie broken by Mayor Margo Zuch.

The legislation repeals the legislation that allowed Village Manager Pete Monteleone and Solicitor Dave Powers to seek interested land owners willing to offer their property along with the roughly 140 acres of municipal property to oil and gas leasing companies to see if any interest exists.

Repealing the legislation was originally suggested by Malibu Drive resident Rebecca Nelis during the Feb. 24 meeting. It was approved by Councilmen Jim Tyger and Alan Cohen and Councilwoman Ellen Beagle.

While Councilman Don Elzer did not speak much during the meeting, he did say repealing the legislation was opening the door for council to repeal other legislation in the future.

"This is ridiculous. If you don't get what you want you come back and make legislation to vote again ... we have lied to everybody about this thing for months," he said, with the comment mostly directed to Cohen.

Cohen, who called the ethics of the proposal into question, said he did not wish to respond to the comment.

He has said the proposal is unethical because council members should not vote on something that could directly bring them financial benefit.

Elzer owns several properties in town and would reap a signing bonus plus royalties on any oil and gas recovered from his leased property.

Cohen has also said while all members of council own property Elzer would be earning more money since he holds the most land, and as such the benefit is not uniform.

"We are talking about a criminal offense, a first degree misdemeanor, six months in the county jail, $1,000 fine," he said.

Cohen said when he first took his seat on council he asked, repeatedly, for an opinion from former Solicitor Shirley Smith, and then her replacement, Dave Powers, and both did not respond.

"She never answered me, not one time, despite the fact that I brought it up more than one time," he said.

The matter has already been forwarded to the Ohio Ethics Commission for review and a possible opinion.

Powers said he is performing some "preliminary research" and if the commission rules it is unethical the village will stop pursuing the matter.

He was asked several times during the meeting by Councilman Fran Figley to comment, and responded he would rather put his opinion in writing, although he did side with Figley and Elzer that the legislation passed last month did not mean any property would be leased, but only allowed for him and Monteleone to seek interest.

"We have an Ohio Ethics Commission and their opinion carries a lot more weight than one village solicitor does, so my recommendation is we wait and see what they say. If they say it is not a conflict then I don't think we have anything to worry about," he said.

The legislation to repeal included a paragraph that stated, "Council has determined that an inquiry should be made as to whether the actions contemplated by said Resolution may violate Ohio Revised Code Section 102.03 or Charter provisions."

Beagle said the commission could opt not to give an opinion, and Figley recalled that is what happened when the village sought its input when former manager Gary Clark and his wife, council clerk Cindy Clark's job performance was called into question.

Cohen and Beagle have also expressed concerns specifically with regards to section two of the original legislation which states, "The village manager and law director are authorized to seek out companies that are, or may be interested in leasing village owned property and the property of willing village land owners."

Cohen claimed it allowed them to negotiate for leases, while Powers contended it did not.

"All I think it authorizes me to do is find out which side of the fence these companies are on," Powers said, referring to oil and gas companies and their potential interest or lack thereof in local property.

Turning back to the ethics question, he said, "I think Don is correct. At this point council has done absolutely nothing that could benefit them at this point. Who of the six of you have benefited from what has gone on at this point?"

Elzer pointed out council members and residents were not opposed to leasing when they were offering municipal property.

"Nobody said anything then," Councilwoman Endia Wisser agreed.

In fact, residents were more vocal about the lack of a lease, Elzer said.

"We sat here for two years and listened to people screaming 'Why haven't we leased our land?'" he said.

He explained the property was not attractive to the companies because it is a "weird shaped piece" in the middle of town. Including residential property will make the land more attractive to companies, he believes.

"Yes, there is some risk involved, there is some risk in driving home. The economic benefit is staggering," Elzer said.

Zuch said she voted for the repeal because the village needs to "slow down" with the process.